Question

Suppose $30,000 is deposited into an account paying 3.5% interest, compounded annually.How much money is in the account after ten years if no withdrawals or additional deposits aremade?

Answer 1

Ok, so

We know that the initial amount which is deposited is $30,000.

For this problem, it is useful to use an exponential function because we know that we're working with a compounded interest.

So, we'll write:

Now, the question ask to us to find how much money is in the ccount after ten years. For this, we just replace t=10 in our equation. Like this,

Therefore, there will be $42317.96 in the account.